The SimplyHeadlines Experiment, paywall edition

Newspaper publishers, frustrated at the difficulties in turning Web content into cash, are strongly considering the possibility of throwing up pay walls around their sites. Yes, they’d lose lots of Web traffic, but they’re hoping enough folks will stick around and pay up to make it worthwhile.

Those publishers might want to take a look at Web developer Josh Lippiner, who recently announced he was going to start charging for his customizable, RSS-based online newspaper. While Lippiner’s hardly operating at the scale of, say, the New York Times — or even the Chronicle — his experience may indicate that not as many consumers of free content are as willing to pony up the bucks as publishers might hope.

Lippiner, who lives in Reno, Nev., created SimplyHeadlines almost five years ago, and opened it to the public in 2006. As I wrote in a March 2007 Computing column, it seemed like something that should have been offered 10 years before, but still it proved to be very useful.

SimplyHeadlines let you create a customized newspaper that was delivered every day via e-mail. Subscribers built their papers by selecting from a list of available RSS feeds, or adding more of their own, then set the time for delivery. Each edition arrived nicely formatted and allowed for a quick scanning of headlines.

SimplyHeadlines became a part of my regular routine. I used it each morning to make sure TechBlog’s Linkposts had up-to-date news. I went to it before moving on to my more cluttered RSS reader. It became a kind of index page for my efforts. My wife subscribed and found it useful for keeping up with general news.

Lippiner kept SimplyHeadlines free, but it cost him money to develop and maintain. He tried putting ads on it but got few takers. At its peak, the site approached 20,000 readers, not really enough to attract advertisers. Lippiner pondered selling it.

Then, earlier this month, Lippiner told subscribers he was going to start charging. In a "letter from the editor," he wrote:

Yes, it’s true. That time has come to make a choice and we choose (my wife and I) not to continue losing money. SimplyHeadlines is a wonderful tool that 99% of you will never miss but given the volume of emails we get for a "do the work for me" custom delivered eNewspaper service, I think some of you recognize the value.

So starting in two weeks SimplyHeadlines will cost $1.99 a month. I ain’t gonna justify it or tell you what a great deal it is – that’s for you decide. Suffice to say it’s been costing us money to run it for far to long.

If this is the end, we loved having you around. Hopefully you liked the service.

If this is the beginning of phase II – we will be accepting PayPal for subscriptions. Send me an email if you will be subscribing.

I thought about it for a few days, and decided SimplyHeadlines was worth it for me. I e-mailed Lippiner and told him to sign me up. Initially, I got no response, which surprised me. Didn’t he want my money?

Apparently not. On Tuesday, I found this in my inbox:

All, I want to say THANK YOU for agreeing to purchase a subscription to SimplyHeadlines. It really means a lot to me that you find value in what we are providing and are willing to pay for the service.

In appreciation for your appreciation :), the service is yours, FOR FREE. No charge now or ever (for you guys). I mean it.

I have deactivated everyone else and left you active. Ill even remove the annoying ad boxes one of these days.

All I ask is when I post a letter from the editor for some charitable cause you visit, share and give if you can.

Enjoy your paper!

It turns out he never meant to charge. The paywall exercise was, like SimplyHeadlines itself, an experiment. In a e-mail exchange, Lippiner told me:

Over 50 offered to pay, which was actually surprising.

And no, I never really planned on charging. It was more of an online business model/social experiment (the entire thing actually) to see how many people would understand the concept that "free" online does not imply "without value."

People need to understand that hard work goes into building these web sites and businesses. "Free" does not give the consumer the license to be a jerk or expect special treatment.

In a blog post, he said he got 56 takers, and will continue to run SimplyHeadlines for 76 people.

It’s unclear how many subscribers he had when he turned off general access (I’ve asked, but haven’t heard back), but let’s say it was around 10,000, which is probably low. That’s a little more than .5 percent. Fifty-six people paying $1.99 a month would have brought in $111.44. That’s not enough to pay server costs.

Update: In an e-mail, Lippiner said he had about 13,000 subscribers when he turned off general access. That makes the I’m-willing-to-pay rate a little more than .4 percent.

Granted, SimplyHeadlines’ model is very different from that of a Web-based publication, and many of Lippiner’s subscribers were probably not using the service. It likely just came to their inboxes and they were too lazy to unsubscribe — until they were asked to pay. But there were probably many more who also used it regularly, as my wife and I did, and most of them didn’t want to pay for it.

I have a feeling that if online publications throw up pay walls, their publishers are going to be horrified at how few people will be willing to pay. Lippiner had no such illusions, and in the end he did the right thing by keeping his service free for those who saw value in it.

By the way, if you want see just how strongly some people feel about being asked to pay for content that was once free, look at the e-mail exchange between Lippiner and one of his now-former subscribers in this post. A warning: It contains some pretty vile language on the part of the customer.

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Netvibes doesn’t have an email option (as far as I know), but otherwise is a similar concept —

Instead of laying out RSS feeds as Google or Bloglines or other software thinks they should be laid out, Netvibes allows a person to arrange them in blocks, headline style, like a customizable newspaper — and allows creation of many tabbed pages, in case you want to organize by sections/topics.

I highly recommend it for anyone who’s intrigued by the features of the old SimplyHeadlines.com.

A few thoughts on Simply Headlines: Many years ago I worked for an oil company. Management decided that they were really an energy company, so for a while they bought up solar energy firms and wind turbine companies. Then they decided they were a natural resources company so they bought up a huge mining company in the USA. Before they were finally sold to a European oil company, they had sold the solar company, the wind turbine company and the mining company – all for a loss.

Newspapers must not make the same mistake. Sure, innovate and go with the future, but don’t forget who you are. Newspapers will be far better off if they give their readers value in the paper rather than try to squeez a few dollars out of online readers (who won’t pay much anyway as this story shows).

My local paper is one of the last family owned big city newspapers. They have closed their suburban offices, a long time complaint of mine since I don’t live in the Big City that the paper takes its name from. But, now they use the internet as it should be, they have a place for me to click so I can see what is going on in my local city council and other local news. A good compromise in my opinion and one that keeps me subscribing and not feeling ignored.

Actually, I enjoyed using the service – until, for some reason, the daily emails quit showing up in my inbox. Maybe it had something to do with a mail server problem I had in the past, I don’t know, but I never followed up – and I don’t remember seeing the “paywall” notification. If I had, I probably would have offered to pay. $1.99/month isn’t all that much (I pay $5.99/mo for the Chron on my Kindle), and to be honest if he would turn the “service” into an iPhone app which could monitor user-selected RSS feeds, I would probably pay a good price (like up to $10) for it.

Newspapers get revenue $$ from two sources: subscribers and advertisers. The net revenue from subscribers would be the $$ left over after subtracting printing and distribution costs. The net revenue from advertisers would be the revenue remaining after deducting ad sales costs.

Dollars they might obtain from internet subscribers wouldn’t be burdened with such high printing and distribution costs. They’d have to pay the journalists and that’s about it.

Online customers would not want to be receiving a raft of classified ads or retail store ads.

The only way I could see it working would be to fragment the news and sell it online in small pieces. It was the low price and “per song” delivery that made iTunes a smash hit for Apple. There is a low price point at which customer resistance falls away. I think $1 per song or $1 per app in the App Store gets to that point.

So a reader might sign up for the Technology section at 50¢ per month or the sports section at $1.50 per month but probably wouldn’t sign up for the entire newspaper at $12 per month.

If he had proposed a subscription price of $0.02 a month, and half of the 13,000 subscribers took him up on it, he could have brought in $130 a month. I agree that the content of some websites is worth paying for, but some of the prices that some websites think they’re worth is almost laughable, and if they would drop their price to something reasonable, they might actually get more revenue.

The Brownsville Herald, the Monitor in McAllen and the Valley Morning Star in Harlingen are all owned by Freedom Communications. They also own other papers across the U.S. I wonder how this experiment is working out?

The Harlingen Valley Morning Star began charging for online access to the newspaper on July 15, 2009. It is the first newspaper owned by Freedom Communications to do so.

On July 11, 2009 the newspaper reported:

“Readers who now subscribe seven days a week to the printed newspaper will have free unlimited access to the online edition.

These subscribers will need only to register online for full access to the Web site that provides regular news updates throughout the day, as well as video and other features.

“The days of giving content away, which costs money to create and for which we charge our print subscribers, I think, are just over,” he said.

Readers who prefer to obtain their news online will be able to subscribe for an online-only edition, with all the daily news updates, video and other features, Patton said.

The Star was chosen to inaugurate Freedom Communications’ online initiative for the frequency of its daily updates to valleystar.com and its adoption of other online-only features, which this year has resulted several times in a million or more online page views per month.

“It’s something that’s being looked at in this industry by virtually every newspaper company,” Patton said.

Full online-only access will be available for $3.95 per month.

Daily online subscriptions are available for 75 cents. Readers can pay for their online editions by credit card at the Valley Morning Star Web site.”

Considering what I pay for internet access, I won’t pay anything extra for content. You can blame Comcast’s outrageous fee for that. If a site starts to charge, I’ll simply find the same content somewhere else for free.

So, an aggregator — who creates no new content but simply repackages other peoples’ work — engages in an experiment to “see how many people would understand the concept that ‘free’ online does not imply ‘without value.’ ”

And then this: “People need to understand that hard work goes into building these web sites and businesses.”

Don’t get me wrong, I have no problem with aggregation on the Web, it’s just this guy’s rhetoric and reality seem far apart.